熵基科技：熵基科技股份有限公司2024年第一季度报告英文版

ZKTeco 2024 Q1 Report 1 Stock Code: 301330 Abbreviation of Securities: ZKTECO Announcement No.: 2024-023 ZKTECOCO., LTD. 20241st Quarter Report The Company and all members of the Board of Directors guarantee that the information disclosed is true, accurate and complete, without any false records, misleading statements or material omissions. Important content tips: 1. The Board of Directors, the Board of Supervisors, directors, supervisors and senior management guarantee that the information presented in this report is true, accurate and complete without any false records, misleading statements or material omissions, and will undertake individual and joint legal liabilities. 2. The Company's legal representative, the person in charge of the accounting work, and the person in charge of accounting institution (accounting supervisor) hereby declare that the financial information in this report is true, accurate and complete. 3. Whether the 1st Quarter Report has been audited □ Yes No ZKTeco 2024 Q1 Report 2 I. Key Financial Data (I) Main Accounting Data and Financial Indicators Whether the Company performed a retroactive adjustment or restatement of the previous accounting data □ Yes No Current reporting period The same period last year Increase/decrease in this reporting period compared to the same period last year (%) Operating revenue (RMB) 399,677,922.33403,022,827.48 -0.83% Net profit attributable to shareholders of listed companies (RMB) 26,334,496.7331,690,542.22 -16.90% Net profit attributable to shareholders of listed companies after deducting non-recurring profits and losses (RMB) 21,211,610.6930,281,180.21 -29.95% Net cash flows from operating activities (RMB) 61,516,123.2564,369,898.55 -4.43% Basic EPS (RMB/share) 0.13630.2098 -35.03% Diluted EPS (RMB/share) 0.13570.2121 -36.02% Weighted average return on net assets 0.81% 1.03% -0.22% At the end of this reporting period At the end of the previous year Increase or decrease at the end of this reporting period compared to the end of the previous year (%) Total assets (RMB) 3,842,695,159.183,923,900,732.70 -2.07% Owner's equity attributable to shareholders of the listed company (RMB) 3,233,242,654.113,265,413,589.20 -0.99% (II) Items and Amounts of Non-recurring Gains and Losses Applicable □ Not applicable Unit: RMB Item Amount during this reporting period Remarks Losses and gains from disposal of non-current assets (including the offsetting portion of the provision for asset impairment) -39,306.15 Government subsidies included in current profits and losses (except those closely related to the normal business of the Company, which are in line with national policies and regulations, enjoyed according to determined standards, and have a continuous impact on the Company's profits and losses) 4,244,025.36 Mainly due to government subsidies received during the reporting period Profits and losses from fair value changes arising from the holding of financial assets and financial liabilities by non-financial enterprises, as well as the gains and losses 1,635,451.13 ZKTeco 2024 Q1 Report 3 arising from the disposal of financial assets and financial liabilities except for effective hedging business related to the normal operation of the Company Capital occupancy fees charged to non-financial enterprises included in current profits and losses 10,644.45 Other non-operating income and expenses other than the above items 189,944.64 Less: income tax impact 846,942.22 Minority interest impact (after tax) 70,931.17 Total 5,122,886.04 -- Details of other profit and loss items that meet the definition of non-recurring profits and losses □ Applicable Not applicable The Company does not have other specific conditions of profit and loss items that meet the definition of non-recurring profits and losses. Explanations on classifying any non-recurring gain/loss item mentioned in the "Explanatory Announcement for Information Disclosure by Companies that Issue Securities to the Public No.1 -Non-recurring Gains and Losses" as recurring gain/loss item □ Applicable Not applicable The Company does not classify any non-recurring gain/loss item mentioned in the "Explanatory Announcement for Information Disclosure by Companies that Issue Securities to the Public No.1 -Non-recurring Gains and Losses" as recurring gain/loss item. (III) Changes and Reasons for Changes in Key Accounting Data and Financial Indicators Applicable □ Not applicable Balance Sheet Items March 31,2024 December 31, 2023 Change ratio Reasons Other non-current assets 23,158,491.21 16,884,605.8537.16% Mainly due to the implementation fee of the new ERP system paid in the current period Taxes and dues payable 14,664,359.01 28,892,229.44 -49.24% Mainly due to the payment of previous years' corporate income tax in the current period Treasury stock 59,683,228.10 784,700.007505.87% Mainly due to the repurchase of shares in the current period Income Statement Items January-March 2024 January-March 2023 Change ratio Reasons Taxes and surcharges 5,753,958.79 2,815,533.99104.36% Mainly due to the tax increase in the first quarter of this year calculated and determined by local regulations for some overseas subsidiaries Other income 5,343,759.73 3,354,811.9059.29% Mainly due to the year-on-year increase in R&D subsidies received by subsidiaries in the current period Gains from changes in fair value 236,066.720.00 100.00% Mainly due to the income from financial products Losses from credit impairment (loss expressed with "-") 1,471,208.38 818,545.2679.73% Mainly due to the decrease in accounts receivable at the end of this period, resulting in the reversal of bad debt reserves Cash Flow Statement Items January-March 2024 January-March 2023 Change ratio Reasons Net cash flows from operating activities -51,857,022.79 8,704,305.63 -695.76% Mainly due to a decrease in current mature financial products and an increase in investment in ongoing projects Net cash flows from financing activities -69,620,223.57 -20,327,769.95 -242.49% Mainly due to the payment of stock repurchase funds in the current period Net increase in cash and cash equivalents -58,904,092.39 49,073,776.48 -220.03% Mainly due to a decrease in net cash flow from investing activities and financing activities in the current period ZKTeco 2024 Q1 Report 4 II. Shareholder Information (I) Table of the Total Number of Common Shareholders and the Number of Preferred Shareholders with Resumed Voting Rights and Information about Top Ten Shareholders Unit: share Total number of common shareholders at the end of the reporting period 19,470 Total number of preferred shareholders whose voting rights have been recovered at the end of the reporting period (if any) 0 Particulars about the top 10 shareholders (excluding shares lent through refinancing) Name of shareholder Nature of shareholder Shareholding percentage (%) Total shares held at the period-end Number of shares with trading restrictions Pledge, marking or frozen Share status Amount Shenzhen ZKTeco Times Investment Co., Ltd. Domestic non state-owned corporation 30.05% 58,500,000.0058,500,000.00 Not applicable 0.00 Che Quanhong Domestic individual 17.48% 34,022,300.0034,022,300.00 Not applicable 0.00 Shenzhen JYSJ Investment Enterprise (Limited Partnership) Domestic non state-owned corporation 7.25% 14,107,600.0010,580,700.00 Not applicable 0.00 Shenzhen JYHY Investment Enterprise (Limited Partnership) Domestic non state-owned corporation 7.15% 13,921,050.0010,440,787.00 Not applicable 0.00 Dongguan LX Investment Partnership Enterprise (Limited Partnership) Domestic non state-owned corporation 5.08% 9,880,000.009,880,000.00 Not applicable 0.00 Shenzhen JYLX Consulting Enterprise (Limited Partnership) Domestic non state-owned corporation 2.42% 4,717,910.003,561,285.00 Not applicable 0.00 Shenzhen JYQL Investment Consulting Enterprise (Limited Partnership) Domestic non state-owned corporation 0.89% 1,724,900.001,322,100.00 Not applicable 0.00 Huaxin Yuanchuang (Qingdao) Investment Management Others 0.87% 1,701,621.000.00 Not applicable 0.00 ZKTeco 2024 Q1 Report 5 Co., Ltd. - Qingdao Walden Zhongxiang Investment Center (Limited Partnership) Hong Kong Securities Clearing Company Limited Overseas corporation 0.36% 700,997.000.00 Not applicable 0.00 Shenzhen Gohedge Fund Management Co., Ltd. - Gohedge Pearl No.1 Private Equity Fund Others 0.35% 688,580.000.00 Not applicable 0.00 Particulars about shares held by the Top 10 common shareholders holding shares that are not subject to trading restriction(s) Name of shareholder Number of shares without trading restrictions Types of shares Types Amount Shenzhen JYSJInvestment Enterprise (Limited Partnership) 3,526,900.00 RMB denominated ordinary shares 3,526,900.00 Shenzhen JYHYInvestment Enterprise (Limited Partnership) 3,480,263.00 RMB denominated ordinary shares 3,480,263.00 Huaxin Yuanchuang (Qingdao) Investment Management Co., Ltd. - Qingdao Walden Zhongxiang Investment Center (Limited Partnership) 1,701,621.00 RMB denominated ordinary shares 1,701,621.00 Shenzhen JYLXConsulting Enterprise (Limited Partnership) 1,156,625.00 RMB denominated ordinary shares 1,156,625.00 Hong Kong Securities Clearing Company Limited 700,997.00 RMB denominated ordinary shares 700,997.00 Shenzhen Gohedge Fund Management Co., Ltd. - Gohedge Pearl No.1 Private Equity Fund 688,580.00 RMB denominated ordinary shares 688,580.00 Shenzhen Fuhai Juanyong I Venture Investment Fund (Limited Partnership) 666,138.00 RMB denominated ordinary shares 666,138.00 Shenzhen JYQLInvestment Consulting Enterprise (Limited Partnership) 402,800.00 RMB denominated ordinary shares 402,800.00 Changjiang Wealth Asset Management - Bank of Nanjing - Changjiang Wealth - ZKTeco Employee Strategic Placement No.1 Collective Asset Management Plan 379,592.00 RMB denominated ordinary shares 379,592.00 Zhuo Qiugang 299,790.00 RMB denominated 299,790.00 ZKTeco 2024 Q1 Report 6 ordinary shares Explanation on associated relationship and concerted actions among above shareholders Shareholder Che Quanhong is elder brother of shareholder Che Quanzhong from Shenzhen ZKTeco Times Investment Co., Ltd., and son of Che Jun, partner of Dongguan LXInvestment Partnership Enterprise (Limited Partnership). The shareholder Che Quanhong holds 76.02% of the equity of Shenzhen ZKTeco Times Investment Co., Ltd., being the controlling shareholder of Shenzhen ZKTeco Times Investment Co., Ltd. Meanwhile, Che Quanhong holds 1.18% of the property share of shareholder Dongguan LX Investment Partnership Enterprise (Limited Partnership). Che Quanzhong, the younger brother of shareholder Che Quanhong, holds a 23.98% equity in Shenzhen ZKTeco Times Investment Co., Ltd. Che Jun, the father of shareholder Che Quanhong, holds 98.68% of the property share of Dongguan LXInvestment Partnership Enterprise (Limited Partnership). In addition, there is no affiliated relationship between the other shareholders of the Company. Information on Top 10 shareholders of participating in margin trading and short selling business (if any) Among the top 10 shareholders, Shenzhen Gohedge Fund Management Co., Ltd. - Gohedge Pearl No.1 Private Equity Fund held a total of 688,580 shares of the Company at the end of the reporting period, including 563,520 shares held through ordinary securities accounts and 125,060 shares held through a margin account of CITICSecurities Co., Ltd. Among the top 10 shareholders not subject to trading restrictions, at the end of the reporting period, Zhuo Qiugang held a total of 299,790 shares of the Company, including 0 share held through ordinary securities accounts and 299,790 shares held through a margin account of Huatai Securities Co., Ltd. Note: Special explanations on the existence of repurchased accounts among the top 10 shareholders not subject to trading restrictions As of March 31,2024, the Company's repurchased account holds 2,230,000 ordinary shares, accounting for 1.15% of the current total share capital of the Company. As required, it is not included in the list of the top 10 shareholders of the Company. It is hereby clarified. Participation of shareholders holding more than 5% of the shares, the top 10 shareholders and the top 10 shareholders of outstanding shares not subject to trading restrictions in the lending of shares through refinancing □ Applicable Not applicable Changes to the top 10 shareholders and the top 10 shareholders of outstanding shares not subject to trading restrictions compared to the previous period due to reasons related to lending/repayment through refinancing □ Applicable Not applicable (II) Table of the Total Number of Preferred Shareholders of the Company and the Shareholding of the Top 10 Preferred Shareholders □ Applicable Not applicable (III) Changes in Restricted Shares □ Applicable Not applicable III. Other Important Events Applicable □ Not applicable 1. Matters related to the adjustment of investment projects with raised funds ZKTeco 2024 Q1 Report 7 The Company held the 9th Session of the Third Board Meeting and the 8th Session of the Third Supervisory Board Meeting on April 22,2024, and approved the "Proposal on Adjusting the Implementation Method, Total Investment Amount and Delay of Part of the Raised Fund Investment Projects". The Company plans to change the investment in Tangxia R&DCenter site in the "R&DCenter Construction Project" of the raised fund investment project from a newly built R&D site to the use of existing idle sites, and adjust the corresponding total investment amount. The Company plans to postpone the "Hybrid Biometrics IoTIntelligent Industrial Base Project" and "R&DCenter Construction Project" to the date when the expected conditions for use are met. For details, please refer to the "Announcement on Adjusting the Implementation Method, Total Investment Amount and Delay of Part of the Raised Fund Investment Projects" (Announcement No.2024-020) disclosed by ZKTeco on CNINFO (. IV. Quarterly Financial Statements (I) Financial Statements 1. Consolidated Balance Sheet Prepared by: ZKTECOCO., LTD. March 31,2024 Unit: RMB Item March 31,2024 January 1,2024 Current assets: Monetary funds 1,884,448,540.691,990,924,954.78 Deposit reservation for balance Lendings to banks and other financial institutions Trading financial asset 88,038,670.4880,980,203.63 Derivative financial assets Notes receivable Accounts receivable 446,451,642.30479,803,313.66 Receivable financing Prepayment 28,917,055.5923,457,907.24 Premiums receivable Reinsurance accounts receivable Reserves for reinsurance contract receivable Other receivables 34,630,409.4332,744,574.20 Including: interest receivable Dividends receivable Buying back the sale of financial assets Inventories 384,035,852.46372,714,784.31 Including: Data resources Contract assets 282,186.31282,186.31 Held-for-sale assets Non-current assets due within one year 20,244,084.8517,257,614.74 Other current assets 25,306,482.4125,865,809.28 Total current assets 2,912,354,924.523,024,031,348.15 Non-current assets: Loans and advances to customers Debt investment 42,231,208.5742,284,596.90 Other debt investment Long-term receivables 2,575,324.442,447,228.23 Long-term equity investment 29,487,115.9929,781,888.62 Other equity instrument investments ZKTeco 2024 Q1 Report 8 Other non-current financial assets Investment real estate 22,735,195.8323,145,488.85 Fixed assets 461,235,340.31470,121,791.29 Construction in progress 175,005,695.51138,986,483.73 Productive biological assets Oil and gas assets Right-of-use asset 34,668,280.0338,669,718.86 Intangible assets 64,661,035.2666,016,371.68 Including: Data resources Development expenditures Including: Data resources Goodwill 505,680.37504,803.72 Long-term deferred expenses 3,736,506.273,768,847.81 Deferred income tax assets 70,340,360.8767,257,559.01 Other non-current assets 23,158,491.2116,884,605.85 Total non-current assets 930,340,234.66899,869,384.55 Total assets 3,842,695,159.183,923,900,732.70 Current liabilities: Short-term loan Borrowings from the Central Bank Borrowings from banks and other financial institutions Trading financial liabilities Derivative financial liabilities Notes payable 109,360,178.00122,573,544.09 Accounts payable 214,997,773.19245,084,182.32 Advances from customer Contract liabilities 80,014,301.4465,331,106.17 Financial assets sold for repurchase Deposit from customers and interbank Acting trading securities Acting underwriting securities Payroll payable 52,007,326.3456,630,101.98 Taxes and dues payable 14,664,359.0128,892,229.44 Other payables 40,586,069.6936,735,314.36 Including: interest payable Dividends payable Handling charges and commissions payable Reinsurance accounts receivable Liabilities held for sale Non-current liabilities due within one year 16,818,104.9721,094,682.36 Other current liabilities 14,573,690.6816,463,934.35 Total current liabilities 543,021,803.32592,805,095.07 Non-current liabilities: Reserves for insurance contracts Long-term loan 7,339,071.567,810,405.04 Bonds payable Including: preferred stock Perpetual bonds Lease liabilities 19,799,481.8619,713,286.21 Long-term payables Long-term payroll payable Estimated liabilities 600,000.00600,000.00 Deferred income 1,807,011.401,853,549.62 ZKTeco 2024 Q1 Report 9 Deferred tax liability 10,057,736.5510,329,053.48 Other non-current liabilities Total non-current liabilities 39,603,301.3740,306,294.35 Total liabilities 582,625,104.69633,111,389.42 Owner's equity: Share capital 194,679,508.00194,679,508.00 Other equity instruments Including: preferred stock Perpetual bonds Capital reserve 2,079,667,212.272,075,479,375.13 Less: treasury stock 59,683,228.10784,700.00 Other comprehensive income 24,206,218.3328,000,959.19 Special reserve Surplus reserves 60,455,422.5060,455,422.50 General risk reserves Undistributed profits 933,917,521.11907,583,024.38 Total owner's equity attributable to the parent company 3,233,242,654.113,265,413,589.20 Minority interests 26,827,400.3825,375,754.08 Total owner's equity 3,260,070,054.493,290,789,343.28 Total liabilities and owner's equity 3,842,695,159.183,923,900,732.70 Legal Representative: Jin Hairong. Person in charge of accounting work: Wang Youwu. Person in charge of accounting institution: Fang Li 2. Consolidated Income Statement Unit: RMB Item 2024 Q12023 Q1 I. Total operating revenue 399,677,922.33403,022,827.48 Including: operating revenue 399,677,922.33403,022,827.48 Interest income Premium earned Revenue from handling charges and commissions II. Total operating cost 378,734,196.82366,431,964.03 Including: operating cost 201,116,936.42206,936,533.66 Interest expense Expenses from handling charges and commissions Surrender value Net payments for insurance claims Net provisions for policy reserves Policy dividend expenses Reinsurance expenses Taxes and surcharges 5,753,958.792,815,533.99 Selling expenses 104,329,442.4789,773,070.43 Administrative expenses 25,327,005.1627,990,999.21 R&D expenses 51,910,740.4747,376,880.92 Financial expenses -9,703,886.49 -8,461,054.18 ZKTeco 2024 Q1 Report 10 Including: interest expenses 421,820.99770,609.19 Interest income 13,367,815.4915,105,655.30 Plus: other income 5,343,759.733,354,811.90 Investment income ( loss expressed with "-") 1,890,785.101,975,900.37 Including: income from investment in associates and joint ventures -314,021.14806,641.55 Gains from derecognition of financial assets measured at amortized cost Gains from foreign exchange (loss expressed with "-") Gains from net exposure hedging (loss expressed with "-") Gains from changes in fair value (loss expressed with "-") 236,066.72 Losses from credit impairment (loss expressed with "-") 1,471,208.38818,545.26 Losses from impairment of assets (loss expressed with "-") -2,438,868.00 -3,282,698.64 Gains from disposal of assets (loss expressed with "-") -39,306.15 -203,207.68 III. Operating profit (loss expressed with "-") 27,407,371.2939,254,214.66 Plus: non-operating revenue 291,427.7896,744.56 Less: non-operating expenditure 101,483.14304,657.32 IV. Total profit (loss expressed with "-") 27,597,315.9339,046,301.90 Less: income tax expenses 264,464.171,529,528.60 V. Net profit (loss expressed with "-") 27,332,851.7637,516,773.30 (I) Classification by business continuity 1. Net profit from continuing operations (net loss expressed with "-") 27,332,851.7637,516,773.30 2. Net profit from discontinued operations (net loss expressed with "-") (II) Classification by ownership 1. Net profits attributable to owners of parent company 26,334,496.7331,690,542.22 2. Minority shareholders' profit and loss 998,355.035,826,231.08 VI. Other comprehensive income - after tax -3,505,044.17 -4,779,705.56 Net of tax of other comprehensive income attributable to the owner of the parent company -3,794,740.86 -4,816,630.30 Other comprehensive income that cannot be transferred to profit or loss 1. Changes in re-measurement of the defined benefit plan 2. Other comprehensive income that cannot be transferred to profit or loss under the equity method 3. Changes in fair value of other ZKTeco 2024 Q1 Report 11 equity instrument investments 4. Changes in the fair value of the Company's own credit risk 5. Other (2) Other comprehensive income that will be reclassified into profit or loss -3,794,740.86 -4,816,630.30 1. Other comprehensive income that can be transferred to profit or loss under the equity method 2. Changes in fair value of other debt investments 3. Amount of financial assets reclassified into other comprehensive income 4. Provision for credit impairment of other debt investments 5. Cash flow hedging reserve 6. Translation difference of foreign currency financial statements -3,794,740.86 -4,816,630.30 7. Others After-tax net amount of other comprehensive income attributable to the minority shareholders 289,696.6936,924.74 VII. Total comprehensive income 23,827,807.5932,737,067.74 Total comprehensive income attributable to owners of the parent company 22,539,755.8726,873,911.92 Total comprehensive income attributable to minority shareholders 1,288,051.725,863,155.82 VIII. Earnings per share(EPS): (I) Basic EPS 0.13630.2098 (II) Diluted EPS 0.13570.2121 In the event of a merger of enterprise under the same control in the current period, the net profit realized by the combined party before the merger is RMB, and the net profit realized by the combined party in the previous period is RMB. Legal Representative: Jin Hairong Person in charge of accounting work: Wang Youwu Person in charge of accounting institution: Fang Li 3. Consolidated Cash Flow Statement Unit: RMB Item 2024 Q12023 Q1 I. Cash flows from operating activities: Cash received from sale of goods and rendering of services 525,769,205.79453,759,458.45 Net increase in deposits from customers and deposits in banks and other financial institutions Net increase in borrowings from the Central Bank Net increase in borrowings from banks and other financial institutions Cash received from receiving insurance premiums of original insurance contracts Net cash received from reinsurance ZKTeco 2024 Q1 Report 12 business Net increase in deposits and investments from policyholders Cash received from interest, handling fees and commissions Net increase in borrowings from banks and other financial institutions Net capital increase in repurchase business Net cash received from vicariously traded securities Refund of taxes and surcharges 21,527,469.9521,026,770.27 Cash received from other operating activities 31,058,775.6114,989,016.60 Subtotal of cash inflows from operating activities 578,355,451.35489,775,245.32 Cash paid for purchase of goods and rendering of services 262,354,081.90207,708,632.71 Net increase in loans and advances to customers Net increase in deposits in Central Bank and other banks and financial institutions Cash paid for original insurance contract claims Net increase in lendings to banks and other financial institutions Cash paid for interest, handling fees and commissions Cash paid for policy dividends Cash paid to and for employees 143,124,378.64125,445,116.49 Payments of all types of taxes 30,521,553.8813,491,315.70 Other cash payments relating to operating activities 80,839,313.6878,760,281.87 Subtotal of cash outflows from operating activities 516,839,328.10425,405,346.77 Net cash flows from operating activities 61,516,123.2564,369,898.55 II. Cash flows from investing activities: Cash received from disinvestment 391,746,892.28485,364,529.75 Cash received from investment income 1,403,273.88756,078.92 Net cash received from disposal of fixed assets, intangible assets and other long-term assets 52,261.44178,690.17 Net cash received from disposal of subsidiaries and other business units Cash received from other investing activities 68,155.00 Subtotal of cash inflows from investing activities 393,270,582.60486,299,298.84 Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets 67,171,779.6918,760,852.38 Cash paid for investments 377,955,825.70458,834,140.83 ZKTeco 2024 Q1 Report 13 Net increase in pledge loans Net cash paid to acquire subsidiaries and other business units Cash paid for other investing activities Subtotal of cash outflows from investing activities 445,127,605.39477,594,993.21 Net cash flows from operating activities -51,857,022.798,704,305.63 III. Cash flows from financing activities: Cash received from investors Including: cash received by subsidiaries from the absorption of minority shareholders' investments Cash received from borrowings Cash received from other financing activities 1,678,200.00 Subtotal of cash inflows from financing activities 1,678,200.00 Cash paid for debt repayments 461,997.06 Cash paid for distribution of dividends and profits or payment of interest 40,620.2912,487,260.75 Including: dividends and profits paid to minority shareholders by subsidiaries 12,487,260.75 Cash paid for other financing activities 70,795,806.227,840,509.20 Subtotal of cash outflows from financing activities 71,298,423.5720,327,769.95 Net cash flows from financing activities -69,620,223.57 -20,327,769.95 IV. Effect of exchange rate changes on cash and cash equivalents 1,057,030.72 -3,672,657.75 V. Net increase in cash and cash equivalents -58,904,092.3949,073,776.48 Plus: beginning balance of cash and cash equivalents 1,317,020,553.021,077,608,258.10 VI. Closing balance of cash and cash equivalents 1,258,116,460.631,126,682,034.58 (II) Implementation of new accounting standards adjustment for the first time starting from 2024. Relevant project information on financial statements at the beginning of the year □ Applicable Not applicable (III) Audit Report Whether the 20241st Quarter Report has been audited □ Yes No The Company's Q1 Report has not been audited. ZKTECOCO., LTD. Board of Directors April 26,2024